Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.479 | EURUSD 1.17764 | AUDUSD 0.72915 | NZDUSD 0.66883 | USDCAD 1.2904 | USDCHF 0.9590 | GBPUSD 1.3269 |

 

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.17870 | 1.17746

USDJPY                 112.766 | 112.427

GBPUSD               1.32765 | 1.32653

USDCHF               0.95907 | 0.95835

AUDUSD              0.72972 | 0.72811

USDCAD               1.29124 | 1.28992

NZDUSD               0.66942 | 0.66807

EURCHF                1.12979 | 1.12928

EURGBP               0.88795 | 0.88726

EURJPY                 132.883 | 132.426

 

For today

• GBP: A slow session for the Cable with the market holding around the 1.3270 levels for the most part with minor tests above the 1.3275 level and holding the 1.3265 level to the grey hour, Topside congestive offers into the 1.3300 level and likely to continue through to the 1.3350 areas before stops are likely to appear and the market opens through to the 1.3400 areas with minor offers through the sentimental 1.3350 area, congestive offers into the 1.3400-1.3430 area will likely see the market testing quickly through and running to the stronger 1.3500 areas however, it would require some good news at least, downside bids light through the 1.3220 areas with weak stops on a move through the 1.3200 area and opening the market to a deeper move with better bids not likely until around the 1.3100 area.
• JPY: USDJPY moved into the Tokyo session quietly and only deep into the session did it finally push steadily through to threaten the 112.80 level and the awaiting offers and then holding quietly through to the grey hour around the 112.70 level, July highs close, and maybe to close to ignore for the moment, a push through to the level will see some short term sellers in the way with the market congested through to the 113.20 areas before those weak shorts will reappear as weak stops and the market then opening the market to further congestive offers on any run towards the 114.00 area. Downside bids light through the 112.00 areas with weak stops likely to appear quickly on a dip down through the figure, congested through the 111 handle with strength likely to appear on any dip towards the 111.40-111.00 areas to support the market.
• AUD: Another quiet day for the Oz with the market trading in a very tight range reminiscent of Asia yesterday and that is beside the S&P grading, opening just above the 0.7290 levels the market was unable to sustain any real pressure to the topside and running into trouble on each move through to the 0.7296 area before dipping back each time to test towards the 0.7280 area to define the range. As can be seen so far strong offers into the 73 cents level and likely to be congestive through the level until the 0.7320 area breaks that is, possible weak stops could see a run to the 0.7350 level however, at this point the market is again likely to be heavy with the market likely to continue to feel offered in any attempt to push to the topside and the 74 cents area. Downside light back through to the 72 cents area, with bids likely to be still building into the level and further stronger bids on any dips through the level with 0.7150 likely to hold strong bids and weak stops just behind.
• EUR: A very narrow range for Euro with the market generally holding the 1.1780-85 late in the session having moved off the 1.1775 area opening levels through early Tokyo. Topside offers through to the 1.1800 level likely to be very strong and the highs from July, any push through the level will likely see weak stops through the 1.1820 areas if not slightly before and the market free to the 1.1840 level seeing some light stops then moving in and the market increasing in offers on any test through to push into the 1.1880 areas. Downside bids light through to the 1.1700 level with the quick move yesterday leaving that downside light in bids, a push back through the 1.1680 area is likely to see stronger stops reappearing and the market vulnerable for a deeper move.

 

Overnight News

AUD:

S&P changes Australia outlook to AAA/Stable from AAA/Negative

CNY:

China is hitting reality now on impossible tax, deficit goals BBG

JPY:

Japanese bought net 2.3T Yen overseas debt last week

EUR:

EU has brutally killed chequers plan and the UK must now brace itself for no deal

Italian bonds slide as coalition budget rifts threaten to widen

Praet: Confident on sustained convergence of inflation

Praet: Uncertainties have gained more prominence recently

Praet: Significant monetary policy stimulus still needed

Praet: Markets interpreted reinvestment timeframe of 2-3 years

Praet: Don’t want to show all cards on reinvestment timeframe

USD:

US sanctions China for buying Russia war planes, missiles RTRs

 

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

JPY         National CPI Core Y/Y Aug A 0.90% | C 0.90% | P 0.80%

JPY         PMI Manufacturing Sep (P) A 52.9 | C 53.1 | P 52.5

JPY         All Industry Activity Index M/M Jul A 0.0% | C 0.20% | P -0.80% | R -0.90%

06:45     EUR        French GDP Q/Q Q2 (F) C 0.20% | P 0.20%

07:15     EUR        France Manufacturing PMI Sep (P) C 53.3 | P 53.5

07:15     EUR        France Services PMI Sep (P) C 55.4 | P 55.4

07:30     EUR        Germany Manufacturing PMI Sep (P) C 55.8 | P 55.9

07:30     EUR        Germany Services PMI Sep (P) C 55.1 | P 55

08:00     EUR        Eurozone Manufacturing PMI Sep (P) C 54.4 | P 54.4

08:00     EUR        Eurozone Services PMI Sep (P) C 54.5 | P 54.5

08:30     GBP       Public Sector Net Borrowing (GBP) Aug C 3.0B | P -2.9B

12:30     CAD       Retail Sales M/M Jul P -0.20%

12:30     CAD       Retail Sales Ex Auto M/M Jul P -0.10%

12:30     CAD       CPI M/M Aug P 0.50%

12:30     CAD       CPI Y/Y Aug P 3.00%

12:30     CAD       CPI Core Common Y/Y Aug P 1.90%

12:30     CAD       CPI Core Median Y/Y Aug P 2.00%

12:30     CAD       CPI Core Trim Y/Y Aug P 2.10%

13:45     USD       US Manufacturing PMI Sep (P) C 55.1 | P 54.7

13:45     USD       US Services PMI Sep (P) C 54.9 | P 54.8

 

Harry Hindsight

• GBP: Again Cable out performs the market, opening in Asia dipping slightly from the 1.3150 level and then running around the 1.3140 for several hours before a steady rise through to the opening levels and holding into the grey hour, early London were steady buyers and the market traded in a tight channel pushing through to the 1.3215 areas before slowing for a short period, the push through saw some increased interest with the market moving to the 1.3250 level a little quicker and the rally continuing through to just below the 1.3300 area before drifting off through to the London close before again pushing from the 1.3230 level to hold around the 1.3270 areas to the close. Salzburg saw EU member states putting PM May down hard on her chequers plan and reporting to the media that the UK should have another vote, and a favourite for the EU lets vote until we get the answer we would like.
• JPY: USDJPY was kept in a tight range through most of the day only moving once the market moved deeper into the US session, opening around the 112.30 level the market made only limited gains to just above the opening levels before dipping away through to the 112.10 areas late in the session, the move through into the London session saw the market holding in the previous range and unable to push back through the opening level and running to the NYK session drifting slowly to push below the 112.10 level, movement in early morning NYK saw the USDJPY breaking through to the 112.50 areas before drifting again for several hours but holding to the close in the 112.40-50 areas.
• AUD: After a tight range through the Asian session with a slightly drift lower the move into the London session saw the market starting to rise and pushing through the opening level into London, the move into NYK saw a slow push from the Asian lows just below 0.7260 and test through to the 0.7280 areas before holding quietly and unable to step beyond the 0.7290 until late into the day with the market making the highs in the final hour or so to the close.
• EUR: Euro rose from the early lows around the 1.1670 areas and pushed to the 1.1685 areas as it quietly moved through the Asian session and into the grey hour, early London saw modest gains to the 1.1700 area and seemed to lag the GBP for a period however, as Cable moved ahead the Euro finally started to climb through the figure level and push through to the 1.1720 with weak stops triggering some stronger buying through into the NYK session testing to the 1.1770 areas before finding some opposition and drifting through to the end of London holding the 1.1740 level, with London gone the buying reappeared and while not as aggressive as the early buying the market did manage to push to new highs into the run to the close testing the 1.1785 area before drifting off to finish the day around the 1.1775 areas.

 

Yesterday’s premiership results

NZD       GDP Q/Q Q2 A 1.00% | C 0.80% | P 0.50%

NZD       GDP Y/Y Q2 A 2.80% | C 2.50% | P 2.70% | R 2.60%

CHF        Trade Balance (CHF) Aug A 2.13B | C 2.41B | P 2.26B | R 2.21B

CHF        SNB Sight Deposit Interest Rate A -0.75% | C -0.75% | P -0.75%

CHF        SNB 3-Month Libor Lower Target Range A -1.25% | C -1.25% | P -1.25%

CHF        SNB 3-Month Libor Upper Target Range A -0.25% | C -0.25% | P -0.25%

GBP       Retail Sales M/M Aug A 0.30% | C -0.10% | P 0.70%

CAD       ADP Payrolls Report Aug A 13.6K | P 11.6K

USD       Philly Fed Manufacturing Index Sep A 22.9 | C 16.3 | P 11.9

USD       Initial Jobless Claims (SEP 15) A 201K | C 210K | P 204K

EUR        Eurozone Consumer Confidence Sep (A) A -3 | C -2 | P -2

USD       Leading Index Aug A 0.40% | C 0.50% | P 0.60% | R 0.70%

USD       Existing Home Sales Aug A 5.34M | C 5.39M | P 5.34M

USD       Natural Gas Storage A 86B | C 81B | P 69B

 

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